BAGHDAD, Iraq (CNN) -- Shiites angry over the arrest of a top cleric's deputy stormed through a Baghdad neighborhood Sunday, killing seven U.S. troops, wounding dozens more and taking over buildings, coalition officials said.

The killings in the Shiite-majority Sadr City neighborhood came on a day that saw deadly clashes between protesters and coalition forces in the holy city of Najaf and a car bombing in Kirkuk.

In addition, military officials said two U.S. Marines were killed in separate attacks west of Baghdad over the weekend.

One coalition official said U.S. troops had regained control of five police stations in Baghdad taken over by the banned "Mehdi's Army" -- a militia loyal to radical Shiite cleric Moqtada al-Sadr.

The official said troops also surrounded al-Sadr's main office in Sadr City, a slum named for the cleric's father, who was killed by Saddam Hussein's regime.

The fighting apparently started when a group of insurgents ambushed U.S. troops with rocket-propelled grenades, one official said. The military sent in more than a dozen tanks, and worked with Iraqi police to retake the buildings and bring order.

The military said Iraqi police reported the Shiite militia was blocking roads with buses in another Shiite neighborhood, Kahatmiya, where armed men had earlier taken over a police station.

Al-Sadr, who has spoken against the U.S. presence in Iraq, was believed to have taken refuge in the al-Kufa mosque near the holy city of Najaf in southern Iraq, where clashes between coalition troops and protesters continued late Sunday night, a senior coalition official said.

The Shiite protesters are angry over what they see as the coalition's targeting of al-Sadr, particularly the arrest Saturday of Mustafa al-Yaqoubi, al-Sadr's deputy.

Coalition officials said the Iraqi police warrant for al-Yaqoubi's arrest accused him of being linked to the killing of a Shiite official near a mosque a year ago, a crime that authorities attributed to a power struggle.

Hours earlier, chief U.S. civilian administrator in Iraq L. Paul Bremer called on Iraqis to protest peacefully, warning that attacks "will not be tolerated."

Violence in Najaf

A crowd of Shiites who had traveled from throughout the country to Najaf tried to enter Camp Golf, a coalition garrison housing Spanish troops and an Iraqi police station, coalition officials said.

Some protesters opened fire at the garrison and troops returned fire, coalition officials said. Video from the scene showed protesters firing.

A Salvadoran soldier was killed, and 12 other Salvadorans and a U.S. soldier were wounded, a coalition statement said. The Salvadorans are serving with the Spanish forces in Iraq.

An Iraqi police commander said demonstrators also looted a police station, taking weapons and computers, and injuring two police officers. The number of Iraqi casualties was not immediately known.

A Najaf-based Iraqi who reports for CNN and several other news organizations was shot while covering the protest and was treated in a hospital in Najaf.

A senior coalition official said that after the exchange of gunfire began, ground forces called for close air support.

Apache helicopters and fixed-wing aircraft responded but did not fire, the official said. Their presence was believed to have helped disperse the crowd, the official said.

A Spanish officer ducks as his base comes under attack near Kufa.

The shooting began at about 11:45 a.m. (3:45 a.m. ET) and continued sporadically throughout the day, even after the crowds largely dispersed, finally ending at about 7 p.m. (11 a.m. ET), the official said.

Coalition forces arrested al-Yaqoubi on Saturday in Najaf in connection with the death of Abdul Majeed al-Khoei on April 10, 2003, a senior coalition official said.

Iraqi security forces requested coalition assistance in carrying out the arrest, which was provided, the official said. Al-Yaqoubi will face trial in an Iraqi court, the official said.

U.S. officials said they are keeping an eye on al-Sadr, whom they accuse of instigating violence.

He recently delivered a sermon stating his support for Hamas and Hezbollah, two militant Islamic groups that claim responsibility for terrorist attacks against civilians in Israel, Gaza and the West Bank. The United States labels both groups terrorist organizations.

In Kirkuk, a car bomb detonated early in the afternoon in Festival Square, said Shirko Shakir Hakim, commander of the northern city's police department.

Five Iraqis were wounded, including a child and a member of the Iraqi Civil Defense Corps, he said. A witness at the scene reported that a U.S. military Humvee was destroyed, injuring an undetermined number of U.S. military personnel.

Security institutions created

The fighting Sunday eclipsed what Bremer called a "milestone" for Iraq -- the creation of new government agencies aimed at building democratic self-rule.

The new agencies are: the Ministry of Defense, the Iraqi National Intelligence Service and the Ministerial Committee for National Security.

"These organizations will give Iraqis the means to defend their country against terrorists and insurgents," Bremer said at a news conference before the fighting in Baghdad.

Addressing the violence in Najaf, Bremer said Iraqis have new freedoms that they never had under Saddam.

"But those freedoms must be exercised peacefully," he said. "This morning a group of people in Najaf have crossed the line and have moved to violence. This will not be tolerated."

Massoud Barzani, current president of the Iraqi Governing Council, said such violence is "rejected by the Iraqi people in its entirety."

Bremer emphasized the new institutions will not have the widespread, blanket powers they had under Saddam's dictatorial regime.

Civilians will retain control over the military, because the elected prime minister and the minister of defense -- both civilians -- will oversee military forces, he said.

The prime minister and all ministers are also "subject to oversight by the elected national assembly," Bremer said.